Divorce can disrupt a lot of things in your life, but many couples underestimate how much it really reshapes their finances.
At VM Family Law, we have years of experience helping divorcing couples to divide their assets, finding solutions for you and any children involved.
What happens financially when you get divorced?
A 50/50 split of finances between parties is always the starting point, however, you shouldn’t just automatically assume that this is what you will receive. There are many factors to consider in order to arrive at a fair settlement.
Finance entitlements in a divorce can vary depending on your specific circumstances and your current financial situation. In a divorce settlement, you may share assets like:
Income if needed for spousal maintenance or because there are dependent childrennt to desert you, so this ground was rarely used under the old divorce law.
Properties
Business assets
Pensions
Savings & investments
What personal finances does divorce change?
There are a few different ways a divorce can change your personal finances, including the following:
- Living costs – When you divorce your partner, your living costs change from being for two adults to just one, but this doesn’t mean living costs will reduce dramatically and therefore you need to budget if you are now only a one income home when you were previously a two income home.
- Savings – When there may have been an accumulation of savings in a joint account while you were married, you may only end up with half of it in a financial settlement.
- Wages – If you do not have the main custody of your children, you will likely need to provide child support by sending monthly payments to your ex-spouse. This is again something that needs to be factored in when you consider how your wages will be divided up each month. If your former partner is financially dependent upon you and not able to meet their own needs then you may also need to factor in spousal maintenance payments.
How does divorce financially affect children?
Even after a divorce, both parents are likely to have responsibility for the care and financial support of the children. Since it is likely that the children will spend more time with one parent, it means the other parent will be required to pay child support.
Child support is dealt with by the Child Maintenance Service if parents are not able to agree on an appropriate level of maintenance. There is an online calculator on the CMS website which will help you calculate your liability.
What to keep in mind when dealing with finances during a divorce
Sorting out your finances during a divorce isn’t always quite as straightforward as many would hope, and there are a few things you should take into consideration. To help, we’ve made a list of what you should keep in mind:
- Make a list of the assets you and your ex partner own and any debts you have. This should include everything from your savings, your home, your business, your pension, household items and vehicles.
- Establish how you like to divide your assets and who will pay any loans and the outgoings on any properties.
- Try to agree on how you will support your children. As parents, you are both expected to pay towards the costs of your children.
It’s a good idea to have a divorce settlement drawn up that explains how you’ve decided to divide everything, and for this to be embodied into a court order to ensure that any agreement is legally binding and stops any future financial claims.